June 2009

June 18, 2009

Well at least a couple of them. I gave a talk with this name at LSE the other day, which was extremely well attended. I am not happy with the title at all, which as I joked, makes me sound like a Tom Friedman wannabe. But it does capture a couple of key ideas I was trying to get across: the malleable nature of capitalism, and the need to deploy some institutional imagination to figure out how to close the yawning gap that has opened up between the global reach of markets and the (mostly) national nature of their governance.

Two of the attendees have written long accounts and critiques of the talk, and they can be found here and here. Interestingly, both are written from perspectives that differ sharply from mine: the first is a libertarian and the second a globalization enthusiast's. But both give me enough credit to try to do justice to my ideas, for which I am grateful.

Both reviews say that the LSE audience lapped my lecture up. Well, it would be nice to hear from the silent majority too...

June 14, 2009

My latest Project Syndicate piece argues that the world economy has handled the financial shock rather well so far, but that the real test for globalization is yet to come.

History teaches that global economic order is difficult to establish and maintain in the absence of a dominant economic power. The interwar period, which suffered from a similar crisis of leadership, produced not only a collapse of globalization, but a devastating armed conflict on a global scale.

So the stakes in righting the world economy could not be higher. Mismanage the process, and the consequences could be unimaginable.Unfortunately, many of the solutions on offer are either too timid or demand too much of a global leadership that is in short supply.

The conundrum of global reform is that the proposals that go far enough, such as establishing a global financial regulator, are wildly unrealistic, while those that are realistic, such as reform of the IMF, fall far short of what is needed.

What we need is a vision of globalization that is fully cognizant of its limits. We can start with a simple principle: We should strive not for maximum openness in trade and finance, but for levels of openness that leave ample room for the pursuit of domestic social and economic objectives in rich and poor countries alike. In effect, the best way to save globalization is to not push it too far.

The column offers some hints about what I have in mind, but those who are curious about the details will have to show up at LSE on Tuesday.

June 06, 2009

The post-9/11 emphasis on Pakistan continues to portray madrassas (religious schools) as a focal point – their rising prevalence the subject of great concern. What is surprising is that this “myth” persists despite evidence to the contrary – that madrassas are in fact not the real revolution in the Pakistani educational landscape but rather it is affordable private non-religious “mom-and-pop” schools that now dot the (rural) landscape.

In a series of papers in the past few years using publicly verifiable data sources and established statistical techniques my colleagues and I have documented this private sector revolution and the relative absence of a madrassa revolution.[1]

Yet reputable outlets like the New York Times continue to emphasize the supposed centrality of Pakistani Madrassas. In a compelling but factually misleading piece on May 3rd entitled “Pakistan’s Islamic Schools Fill Void, but Fuel Militancy” a veteran reporter rehearses a well-known narrative in which government schools are failing and the madrassas are proliferating, providing the only viable source of education for the poor. Private schools, while mentioned, are discounted as “out of reach of most middle-class Pakistanis”. While government schools, much like the public sector in most developing countries, face substantial challenges, the last two claims are simply not correct – they were not in the years around 2001 (as documented by our previous work), and are still not correct.

Using the latest publicly available educational census data, Madrassas in 2005-06 still only accounted for 1.3 percent of enrolled children (In Pakistan’s four provinces), versus 34 percent in non-religious private schools and the remainder in public schools. The graph below shows that while there is indeed some increase in madrassas over time, the far more striking growth is for non-religious private schools.

Moreover these non-religious private schools are increasingly catering to the middle and poor class. With monthly fees less than a days' unskilled wage rate, they are affordable and attract students from even the poorest households. Madrassas are therefore simply not the schools of last resort. For the average Pakistani child, even among the poor living in rural areas and in urban slums, the most likely alternative to a decrepit public school is not a madrassa but a private school, or no schooling at all. Moreover, despite the low fees and low wages (a fifth of public sector teacher wages) and less qualified (local women) teachers, they offer substantially higher quality education than public schools (likely by better incentivizing and selecting their teachers).

In the particular district - Khanewal - highlighted in the New York Times column as a region of particular concern, the school numbers reflect a similar breakdown - 9% madrassa, 24% private schools, and 66% government schools. Moreover, 95% of private schools in this district are coeducational. Interestingly, this trend is true even in the Pashtun-dominated Northwest Frontier Province. In fact, in the Swat valley, which has occupied much media coverage recently due to the Taliban prevalence there, there were 360 such private schools in 2005 compared to 165 madrassas (National Education Census, 2005).

In yet another attempt to clarify the Madrassa myth, my coauthors and I recently wrote a piece on Foreign Policy (http://www.foreignpolicy.com/story/cms.php?story_id=4958) that also highlights the policy concerns that stem from not getting the facts straight. The NYT article was widely recounted by members of the U.S. House of Representatives with suitable outrage during the House Foreign Affair’s Committee hearing on legislation providing a new aid package for Pakistan. Not surprisingly, the proposed legislation focuses U.S. government attention on reforming madrassas, eliminating those with ties to terrorism and working with the Pakistani government to reform its sprawling pubic school system riven with teacher absenteeism, ghost schools, out of date pedagogy and a deeply problematic curriculum. Yet there is no mention of the mushrooming private sector and the lessons to be learnt from it.

While one may conjecture that the madrassa myth persists since it is politically expedient and offers a simple explanation of recent events in Pakistan, the fact is that the the reality of the Pakistani educational landscape is quite different. Educational reforms that remain focused on madrassas are unlikely to affect the vast majority of Pakistanis and form the basis of “winning the hearts and minds” or of improving the lot of Pakistanis. With Pakistan’s population becoming ever-more dominated by youths, and the need to produce human capital capable of driving a future Pakistani economy, the stakes on getting such basic facts understood and accepted in policy and popular circles could not be higher.

June 01, 2009

I have updated the page with links to Growth Diagnostics exercises that I know of. There is also a volume of Latin American GD case studies that should be coming out from the Inter-American Development Bank next month or so.

I am sure that there are others that I am missing, so if you know of any studies that are not included in my list, do send me a line and I will add a link.